SK Finance files DRHP with Sebi to launch a Rs 2,200 crore IPO

SK Finance has filed its draft red herring prospectus (DRHP) with the capital markets regulator Sebi to launch its initial public offering (IPO). SK Finance is a non-banking finance company (NBFC), which is into vehicle financing and the MSME financing segments, is looking to raise a total of Rs 2,200 crore via IPO.

Of the block, the issue includes a fresh share sale of Rs 500 crore and an offer-for-sale (OFS) of up to Rs 1,700 crore by its promoters and existing shareholders. Rajendra Kumar Setia, Rajendra Kumar Setia HUF, Evolvence Coinvest I, Evolvence India Coinvest III, Norwest Venture Partners X - Mauritius and TPG Growth IV SF are participating in OFS.

The company proposes to utilise the net proceeds from the fresh issue towards augmenting the capital base to meet future business requirements of the company towards onward lending and general corporate purposes. Proceeds from the OFS shall go to the selling shareholders of the company.

The company may undertake a pre-IPO placement of Rs 100 crore in consultation with lead managers of the issue. If this is undertaken, the fresh issue size shall be reduced similarly. The company also has a provision for share reservation for its eligible employees in the IPO.

According to a Crisil report, the company is the fastest growing among its peers based on assets under management (AUM) CAGR in the respective segment for the period between FY21 and FY23.

The company will allocate 50 per cent of the net offer for the qualified institutional bidders (QIBs), while retail investors will get 35 per cent of the net issue. Remaining 15 per cent of the shares shall be allocated for the non-institutional bidders (NIIs).
 

Kotak Mahindra Capital Company, Jefferies India , Motilal Oswal Investment Advisors and Nomura Financial Advisory and Securities (India) are the book running lead managers to the issue. Shares of the company shall be listed on both BSE and NSE.